Delaware Investments Delaware Investments Delaware Investments

Delaware Core Plus Bond Fund


Delaware Core Plus Bond Fund seeks maximum long-term total return, consistent with reasonable risk.


The Fund invests at least 50% of its net assets in domestic (U.S.) investment grade debt securities. The Fund may also invest up to 30% of its net assets in high yield securities and up to 30% of its net assets in foreign securities.

Fund information
Inception date08/16/1985
Dividends paid (if any)Monthly
Capital gains paid (if any)December
Fund identifiers
Investment minimums
Initial investment$1,000
Subsequent Investments$100
Systematic withdrawal balance$5,000
Account features
Payroll DeductionYes

On Sept. 25, 2014, Class B shares of the Fund converted to Class A shares.

The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted.

Total returns may reflect waivers and/or expense reimbursements by the manager and/or distributor for some or all of the periods shown. Performance would have been lower without such waivers and reimbursements.

Average annual total return

as of month-end (09/30/2016)

as of quarter-end (09/30/2016)

YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)5.14%4.05%3.72%3.22%5.21%6.01%08/16/1985
Max offer price0.39%-0.69%2.14%2.27%4.73%5.85%
Bloomberg Barclays U.S. Aggregate Index5.80%5.19%4.03%3.08%4.79%n/a
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)0.65%4.05%3.72%3.22%5.21%6.01%08/16/1985
Max offer price-3.86%-0.69%2.14%2.27%4.73%5.85%
Bloomberg Barclays U.S. Aggregate Index0.46%5.19%4.03%3.08%4.79%n/a

Returns for less than one year are not annualized.

Class A shares have a maximum up-front sales charge of 4.50% and are subject to an annual distribution fee.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

Expense ratio

Net expense ratio reflects a contractual waiver of certain fees and/or expense reimbursements from Nov. 27, 2015 through Nov. 28, 2016. Please see the fee table in the Fund's prospectus for more information. The Fund's Class A shares are subject to a blended 12b-1 fee of 0.10% on all shares acquired prior to June 1, 1992 and 0.25% on all shares acquired on or after June 1, 1992. All Class A shares currently bear 12b-1 fees at the same rate, the blended rate based on the formula described above. This method of calculating Class A 12b-1 fees may be discontinued at the sole discretion of the Fund's Board of Trustees.

Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
Portfolio characteristics - as of 09/30/2016Bloomberg Barclays U.S. Aggregate Index
Number of holdings7529,977
Number of credit issuers260
Portfolio turnover (last fiscal year)316%n/a
Effective duration (weighted average) (view definition)5.85 years5.51 years
Effective maturity (weighted average) (view definition)8.11 years7.82 years
Yield to maturity (view definition)2.81%1.97%
Average market price (view definition)$106.91$106.75
Average coupon (view definition)3.97%3.09%
Yield to worst (view definition)2.79%1.96%
SEC 30-day yield with waiver (view definition)2.00%
SEC 30-day yield without waiver (view definition)1.73%
Annualized standard deviation, 3 years (view definition)2.69n/a
Portfolio composition as of 09/30/2016Total may not equal 100% due to rounding.
Mortgage-backed securities35.1%
Asset-backed securities6.2%
U.S. government securities2.4%
Municipal bonds0.7%
Top 10 fixed income holdings as of 09/30/2016
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
FNCL AL91284.6%
FNR 2011-80 CB1.6%
FNCL AL75870.9%
JPMorgan Chase & Co. 4.250 10/1/20270.8%
Bank of America Corp. 4.450 3/3/20260.8%
FNCL 9323870.7%
Credit Suisse Group Funding Guernsey Ltd. 4.550 4/17/20260.7%
Anheuser-Busch InBev Finance Inc. 3.650 2/1/20260.6%
Total % Portfolio in Top 10 holdings18.1%

Fixed income sectors as of 09/30/2016

List excludes cash and cash equivalents.

Investment grade credits44.9%31.4%
MBS and CMOs29.1%27.7%
High yield credits6.3%0.0%
Asset-backed securities6.2%0.5%
Commercial mortgage-backed securities6.0%1.7%
Emerging markets4.2%0.0%
Municipal bonds0.7%0.0%
U.S. treasury securities0.5%36.3%
International developed0.2%0.0%
Credit quality as of 09/30/2016

Total may not equal 100% due to rounding. The Fund’s investment manager, Delaware Management Company (DMC), a series of Delaware Management Business Trust, receives “Credit Quality” ratings for the underlying securities held by the Fund from three “nationally recognized statistical rating organizations” (NRSROs): Standard & Poor’s (S&P), Moody’s Investors Service, and Fitch, Inc. The credit quality breakdown is calculated by DMC based on the NRSRO ratings. If two or more NRSROs have assigned a rating to a security the higher rating (lower value) is used. If only one NRSRO rates a security, that rating is used. For securities rated by an NRSRO other than S&P, that rating is converted to the equivalent S&P credit rating. Securities that are unrated by any of the three NRSROs are included in the “not rated” category when applicable. Unrated securities do not necessarily indicate low quality. More information about securities ratings is contained in the Fund’s Statement of Additional Information.

Distribution history - annual distributions (Class A)1,2
Distributions ($ per share)
YearCapital gains3Net investment
Return of

1If a Fund makes a distribution from any source other than net income, it is required to provide shareholders with a notice disclosing the source of such distribution (each a "Notice"). The amounts and sources of distributions reported above and in each Notice are only estimates and are not provided for tax reporting purposes. Each Fund will send each shareholder a Form 1099 DIV for the calendar year that will provide definitive information on how to report the Fund's distributions for federal income tax purposes. The information in the table above will not be updated to reflect any subsequent recharacterization of dividends and distributions. Click here to see recent Notices pertaining to the Fund (if any).

2Information on return of capital distributions (if any) is only provided from June 1, 2014 onward.

3Includes both short- and long-term capital gains.

Risk managed solutions

Roger Early, Head of Fixed Income Investments, discusses why the team’s assets under management, structure, and mindset are strengths that help distinguish it from others. [Runtime: 2:14]

Watch the video

Read video transcript

Roger Early

Roger A. Early, CPA, CFA

Executive Director, Head of Fixed Income Investments, Executive Vice President, Co-Chief Investment Officer — Total Return Fixed Income Strategy

Start date on the Fund: May 2007

Years of industry experience: 40

(View bio)

Paul Grillo

Paul Grillo, CFA

Senior Vice President, Co-Chief Investment Officer — Total Return Fixed Income Strategy

Start date on the Fund: February 1997

Years of industry experience: 35

(View bio)

Adam Brown

Adam H. Brown, CFA

Senior Vice President, Senior Portfolio Manager

Start date on the Fund: November 2015

Years of industry experience: 18

(View bio)

Craig Dembeck

Craig C. Dembek, CFA

Senior Vice President, Co-Head of Credit Research, Senior Research Analyst

Start date on the Fund: December 2012

Years of industry experience: 22

(View bio)

J. David Hillmeyer

J. David Hillmeyer, CFA

Senior Vice President, Senior Portfolio Manager

Start date on the Fund: November 2011

Years of industry experience: 23

(View bio)

Paul Matlack

Paul A. Matlack, CFA

Senior Vice President, Senior Portfolio Manager, Fixed Income Strategist

Start date on the Fund: December 2012

Years of industry experience: 31

(View bio)

John McCarthy

John P. McCarthy, CFA

Senior Vice President, Senior Portfolio Manager, Co-Head of Credit Research

Start date on the Fund: December 2012

Years of industry experience: 29

(View bio)

You may qualify for sales-charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in Delaware Investments® Funds. More information about these and other discounts is available from your financial intermediary, in the Fund's prospectus under the section entitled "About your account," and in the Fund's statement of additional information (SAI) under the section entitled "Purchasing Shares."

The table below describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareholder fees
Maximum sales charge (load) imposed on purchases as a percentage of offering price4.50%
Maximum contingent deferred sales charge (load) as a percentage of original purchase price or redemption price, whichever is lowernone
Annual fund operating expenses
Management fees0.55%
Distribution and service (12b-1) fees0.25%
Other expenses0.40%
Total annual fund operating expenses1.20%
Fee waivers and expense reimbursements(0.30%)
Total annual fund operating expenses after fee waivers and expense reimbursements0.90%

1The Fund's investment manager, Delaware Management Company (Manager), has contractually agreed to waive all or a portion of its investment advisory fees and/or pay/reimburse expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale and dividend interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations) in order to prevent total annual fund operating expenses from exceeding 0.65% of the Fund's average daily net assets from Nov. 27, 2015 through Nov. 28, 2016. These waivers and reimbursements may only be terminated by agreement of the Manager and the Fund. Additionally, the Fund's Class A shares are subject to a blended 12b-1 fee of 0.10% on all shares acquired prior to June 1, 1992 and 0.25% on all shares acquired on or after June 1, 1992. All Class A shares currently bear 12b1-fees at the same rate, the blended rate based on the forumula described above. This method of calculating Class A 12b-1 fees may be discontinued at the sole discretion of the Fund's Board of Trustees.

View printable commentary E-mail this page

This commentary is currently not available. Please check back later.

Delaware Core Plus Bond Fund Quarterly commentary September 30, 2016


The Bloomberg Barclays U.S. Aggregate Index recorded a positive return in the third quarter as risk assets continued to respond positively to the unflinching support of global central banks. However, yields rose on short- and intermediate U.S. Treasury maturities amid frequent shifts in the outlook for Federal Reserve policy, declining volatility following the “Brexit” vote in June, and selling by central banks (especially China) related to reserve management programs. Meanwhile, domestic bond markets were supported by non-U.S. investors fleeing the negative sovereign yields on offer overseas. Although most broad-market fixed income indices produced positive returns, high yield corporate bonds and emerging market debt were the strongest performers, with the high-quality AAA-rated credit and asset-backed securities (ABS) sectors lagging during the quarter.

In the United States, the economic scorecard was decidedly mixed. Second-quarter gross domestic product was reported at 1.4% by the U.S. Commerce Department, a modest improvement from the downwardly revised 0.8% growth in the first quarter. There was some evidence of further healing in the labor market, with jobless claims remaining low while nonfarm payrolls rebounded from the depressed levels of the second quarter. On the inflation front, the core personal consumption expenditures (the Fed’s preferred inflation gauge) rose 1.7% year-over-year, up from 1.6% at the end of the previous quarter. Both personal income and consumer spending remained subdued, though slightly improved from three months earlier. Elsewhere, the Institute for Supply Management’s total manufacturing and nonmanufacturing new orders fell from 58.6 to 50.25, the lowest level since 2009.

Given the uneven economic data, it was no surprise to investors that the Fed held off on tightening monetary policy. Notably, the rate-setting Federal Open Market Committee (FOMC) further scaled back its forecast for how high rates will rise in coming years. At its September meeting, the FOMC lowered its expectations for 2016 from two hikes to one, lowered 2017 expectations from three hikes to two, and kept expectations for 2018 unchanged at three. Additionally, policy makers trimmed growth and inflation forecasts for the current year. As the quarter ended, investors were discounting only one rate hike in December over the remainder of 2016. However, a sharp rise in the 3-month London interbank offered rate (Libor) — combined with the selling of Treasury securities by foreign central banks — raised the possibility that some degree of monetary tightening might already be under way, even as the Fed remained on the sidelines.

Within the Fund

Delaware Core Plus Bond Fund (Institutional Class shares and Class A shares at net asset value) outperformed its benchmark, the Bloomberg Barclays U.S. Aggregate Index, for the third quarter of 2016.

  • The Fund’s underweight to Treasury securities had a positive impact on relative performance as Treasury bonds underperformed the benchmark.
  • Government-backed mortgage-backed securities (MBS) outperformed the Index while asset-backed securities (ABS) underperformed. However, relative to the ABS sector within the index, the Fund’s ABS positions outperformed given our emphasis on short-maturity and floating-rate issues. Commercial mortgage-backed securities (CMBS) had a positive impact on relative performance due to our overweight relative to the index.
  • An overweight allocation to investment grade corporate credit benefited the Fund’s relative performance as these securities outperformed the return of the index. Security selection also had a positive effect on performance.
  • The Fund’s allocation to high yield bonds benefited relative performance as the sector outperformed the index for the quarter.
  • Fund positions in emerging market debt had a positive effect on relative performance as the sector outperformed many of the broader fixed income markets.
  • Non-dollar developed markets, while representing only a small allocation within the Fund, produced slightly positive results during the quarter.


We believe both domestic and global growth will remain mired in a lower-for-longer track as a pattern of synchronous stagnation continues to grip the developed world. China remains burdened by massive excess capacity, poor bank asset quality, and the dampening effect of economic restructuring that has led to plummeting commodity prices and slowing growth across all natural resource–based economies. Europe remains hobbled by the structural and policy limitations of a single-currency European Union (EU), a failure to rapidly address bank capital levels and funding mechanisms in the aftermath of the financial crisis, and persistently high unemployment and economic inefficiency across its southern tier. In the U.S., job gains have been centered in low-wage sectors, structural unemployment remains high, overall wage growth has been stagnant, and personal spending is subdued. With corporate and government spending muted and bank lending stabilizing below pre-crisis levels, the American economy is stuck on a sub-2% growth track. Finally, global central bank policy tools have entered the stage of diminishing returns, while in the U.S. a vacillating central bank desperate to get benchmark rates off zero fears that a premature move will choke off the tepid recovery, thus making every Fed meeting a catalyst for volatility in a market addicted to easy money.

Futures markets and Fed statements seem to make it clear that, barring unforeseen deterioration in the growth or employment outlook, a December rate hike is in the offing. While we concur with that view, we have also seen this “movie” before, and believe that nothing can be taken for granted in a world burdened by debt and facing the growth challenges described above.

With global risk-free rates at record low levels and most spread sectors trading at or inside long-term averages, we think it is reasonable to assume that investor demand for yield will remain intense, valuations will become stretched, and trading liquidity will be inadequate in the face of unforeseen market moves. We believe that our active, fundamental, research-based approach to fixed income investing provides the potential for investors to navigate the extraordinary market conditions that we currently face.

Mortgage-backed securities are fixed income securities that represent pools of mortgages, with investors receiving principal and interest payments as the underlying mortgage loans are paid back. Many are issued and guaranteed against default by the U.S. government or its agencies or instrumentalities, such as Freddie Mac, Fannie Mae, and Ginnie Mae. Others are issued by private financial institutions, with some fully collateralized by certificates issued or guaranteed by the U.S. government or its agencies or instrumentalities.

Bond ratings are determined by a nationally recognized statistical rating organization.

Per Standard & Poor’s credit rating agency, bonds rated below AAA are more susceptible to the adverse effects of changes in circumstances and economic conditions than those in higher-rated categories, but the obligor’s capacity to meet its financial commitment on the obligation is still strong. Bonds rated BBB exhibit adequate protection parameters, although adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.


The views expressed represent the Manager's assessment of the Fund and market environment as of the date indicated, and should not be considered a recommendation to buy, hold, or sell any security, and should not be relied on as research or investment advice. Information is as of the date indicated and subject to change.

Document must be used in its entirety.

Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Fund’s prospectus and its summary prospectus, which may be obtained by clicking the prospectus link located in the right-hand sidebar or calling 800 523-1918. Investors should read the prospectus and the summary prospectus carefully before investing.

Investing involves risk, including the possible loss of principal.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Fund may be prepaid prior to maturity, potentially forcing the Fund to reinvest that money at a lower interest rate.

High yielding, non-investment-grade bonds (junk bonds) involve higher risk than investment grade bonds.

The high yield secondary market is particularly susceptible to liquidity problems when institutional investors, such as mutual funds and certain other financial institutions, temporarily stop buying bonds for regulatory, financial, or other reasons. In addition, a less liquid secondary market makes it more difficult for the Fund to obtain precise valuations of the high yield securities in its portfolio.

The Fund may invest in derivatives, which may involve additional expenses and are subject to risk, including the risk that an underlying security or securities index moves in the opposite direction from what the portfolio manager anticipated. A derivatives transaction depends upon the counterparties’ ability to fulfill their contractual obligations.

International investments entail risks not ordinarily associated with U.S. investments including fluctuation in currency values, differences in accounting principles, or economic or political instability in other nations.

Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility and lower trading volume.

If and when the Fund invests in forward foreign currency contracts or uses other investments to hedge against currency risks, the Fund will be subject to special risks, including counterparty risk.

The Fund may experience portfolio turnover in excess of 100%, which could result in higher transaction costs and tax liability.

All third-party marks cited are the property of their respective owners.

Not FDIC Insured | No Bank Guarantee | May Lose Value

Fund Finder

Daily pricing (as of 10/27/2016)

Class APriceNet change
Max offer price$8.84n/a

Total net assets (as of 09/30/2016)

$134.4 million all share classes

Morningstar ranking (as of 09/30/2016)

YTD ranking852 / 1084
1 year907 / 1069
3 years506 / 956
5 years514 / 844
10 years133 / 602
Morningstar categoryIntermediate-Term Bond

(View Morningstar disclosure)

Lipper ranking (as of 09/30/2016)

YTD ranking178 / 212
1 year188 / 202
3 years112 / 188
5 years137 / 162
10 years49 / 94
Lipper classificationCore Plus Bond Funds

(View Lipper disclosure)

Benchmark, peer group

Bloomberg Barclays U.S. Aggregate Index (view definition)

Morningstar Intermediate-Term Bond Category (view definition)

Lipper Core Plus Bond Funds Average (view definition)

Additional information